Uranium International Market ENIN, Recife, Brazil. Serge Gorlin, Head of Industry Cooperation, WNA

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1 Uranium International Market ENIN, Recife, Brazil Serge Gorlin, Head of Industry Cooperation, WNA 25 November 2013

2 WNA links with Brazil Serge Gorlin 2

3 About the WNA 185 Members

4 WNA Working Groups Nuclear Fuel Cycle Plant Performance Fuel Market Report CORDEL Transport Supply Chain Sustainable Used Fuel Management Capacity Optimization Security of the International Fuel Cycle Waste Management & Decommissioning Radiological Protection Economics Nuclear Law & Contracting

5 Representation in Key International Forums International Atomic Energy Agency Nuclear Energy Agency of the OECD UN Framework Convention on Climate Change International Commission on Radiological Protection

6 Public Information & News 200 Information Papers updated regularly page views per day Used by the public, policymakers & industry

7 Public Information & News Free online news service Timely & concise daily reporting Daily distribution: 20,000 and growing

8 Nuclear Fuel Market & Supply Chain Biennial market reports on global fuel market and supply chain

9 World Nuclear Generating Capacity, GWe (2013 WNA Global Fuel Market Report) Serge Gorlin 9

10 World Nuclear Generating Capacity, GWe 2013 vs 2011 Fuel Market Report Serge Gorlin 10

11 Reference Case Capacity Net GWe (2013 to 2030) operating serious emerging Canada Europe E Europe Russia USA 4 18 Other 5 27 China 30 Asia India Latin America Today 2030 Serge Gorlin

12 Assessment of Likely Japanese Reactor Restarts 2013 vs 2011 Report Reactor-by-reactor assessment: Age Size Type Location Serge Gorlin 12

13 ashiwazaki Kariwa Tomari Ohi Takahama Sendai Genkai Serge Gorlin 13

14 Process toward restart July 8 Introduction of New Regulatory Standard At least 6 months July 8&12: Submission of Licensing Application (12 PWRs) Tomari-1,2,3 Takahama-3,4 Ohi-3,4 Ikata-3 Genkai-3,4 Sendai-1,2 September 27: Kashiwazaki-Kariwa-6,7 (2 BWRs) Ongoing Tomari-3 Ikata- 3, Genkai-3,4 Sendai-1,2 Ohi-3,4 Takahama-3,4 Delayed but ongoing Tomari-1,2 KK-6,7 Stuck Regulatory Permission Consent of Local Government?? Final Judgment of Japanese Government?? Restart of Plant Serge Gorlin 14

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19 Global Electricity Generation Mix Evolves Global Capacity Utilized GW 1200 By Generation k TWh Gas Coal Nuclear Wind & Solar 0 Nuclear Wind Solar Oil Other Renewables Serge Gorlin ExxonMobil 2013 Outlook for Energy

20 Projecting Nuclear Reactor Requirements Nuclear generating capacity Fuel cycle and reactor operating factors load/capacity factors, tails assay, fuel burn-up MS Excel-based spreadsheet model computes uranium, conversion and enrichment requirements by year to 2030 Serge Gorlin 20

21 Sensitivity of Factors 0.22% 2013 Market Report Serge Gorlin 21

22 Global Load Factors (using IAEA capacities) Serge Gorlin 22

23 Recent Uranium Production, tu Global production increased by a third Country % change Mines that have opened since 2011 include: Honeymoon (Australia) Langer Heinrich Stage 3 (Namibia) Novokonstantinovskoe (Ukraine) Willow Creek (US) Ramp-up of existing mines continues, led by Kazakhstan (nearly 2ktU increased production ) Australia 5,900 5,983 6,991 18% Brazil % Canada 9,783 9,145 8,998-8% China ,500 81% India % Kazakhstan 17,803 19,451 21,317 20% Malawi 846 1,077 1,101 30% Namibia 4,496 3,258 4,495 0% Niger 4,198 4,351 4,667 11% Russia 3,562 2,993 2,872-19% South Africa % Ukraine % United States 1,660 1,537 1,596-4% Uzbekistan 2,400 2,500 2,400 0% Others % Total 53,663 53,494 58,344 9% Serge Gorlin 23

24 Potential production capacities Four categories of potential production capacities: Mines under development (mines for which development decisions have been made and development spending has commenced) Planned Mines (mines for which a feasibility study has been completed, regulatory process and project financing are advanced, with a definite start-up date) Prospective Mines (projects which have undergone preliminary feasibility study, regulatory approvals initiated and indicative start-up announced) Supply Pipeline (uncategorised supply to meet future demand, eg, development of early stage projects, resurrection of cancelled or deferred projects, unexpected mine life extensions at existing operations) Serge Gorlin 24

25 Production model discount and delay factors Three supply scenarios are developed and production capabilities are projected. Production capability for each mine assumes an expected percentage level of the production capacity as well as a delay (in years) to startup Reference Upper Lower Delay % Expected Delay % Expected Delay % Expected Current Capacity* 0 90% 0 100% 0 85% Mines Under Development -2 90% -1 90% -2 70% Planned Mines -6 80% -5 90% -6 70% Prospective Mines -8 70% -7 90% -8 60% Serge Gorlin 25

26 Reference Scenario Primary Supply to 2030, tu Compared with the 2011 report, expected primary supply has been significantly revised. Capacity definitions are now more based on public statements. Many projects have been transferred to the Supply Pipeline category. Existing capacity incorporates published statements of expected 2030 production (down approx. 20ktU vs 2011 report) Planned and prospective capacity changes reflect project cancellations/deferments (eg, Olympic Dam, Trekkopje) (down approx. 15ktU in 2030 vs 2011 report) Serge Gorlin 26

27 Conclusions WNA nuclear capacity projections have been revised downwards since the 2011 report. Nuclear capacity is still projected to increase at a faster rate than anytime since the 1980s to 574GW by 2030 in the reference scenario leading to projected uranium requirements of 97,000tU. Increased uranium market uncertainty has resulted in the cancellation and deferment of a number of mining projects. As a result, existing and expected capacity plus secondary supply will be insufficient on current plans to meet reference scenario requirements by about Serge Gorlin 27

28 The amount of identified resources in the Red Book continues to increase rapidly World Uranium Resources The overall cost of mining these resources has increased Most of these resources are found in four countries (Australia, Kazak hstan, Russia, Ca nada) Serge Gorlin 28

29 Historical Uranium Production Western World Production was substantially ahead of reactor requirements until 1985, but has since fallen below. Since 1985, requirements have exceeded production by over 450,000 tu. The difference was covered by inventories and other secondary sources Serge Gorlin 29

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31 Mining is a risky business! Main risks hampering the development of the biggest U mining projects Deposit Financial risks Technical risks Political social and environmental risks Olympic Dam (expansion), V V Сigar Lake V V Imouraren V V Midwest V V Jabiluka Elkon V V Serge Gorlin 31

32 Fuel Cycle & Reactor Operating Factors Load factors 10% worldwide increase in 1990s but now stable Enrichment level rising slowly up to 5% U-235 Fuel burn-up now rising above 50 GWd/tU Tails assay possible substitution between uranium and enrichment depending on relative prices Serge Gorlin 32

33 Reactor Construction Performance Serge Gorlin 33

34 Percentage Variation in U & SWU Requirements with Tails Assay Serge Gorlin 34

35 Uranium supply demand sources Uranium mining Secondary sources Reactor related uranium demand Additional demand SUPPLY DEMAND Favorable uranium prices Sufficient and qualitative uranium resources Uranium production capacities Main factors of demand/supply relationship HEU-LEU Program US policy in the uranium inventory reduction and stock balance selling Policy in depleted U, spent fuel and HEU reprocessing Capacities Selection of tails assay Load factors Extending cycle length and enrichment levels Increased burn up Uranium as a trading commodity (stocks trading) Inventory change Serge Gorlin

36 World Uranium Requirements, tu (2013) Serge Gorlin 36

37 World Uranium Requirements, tu 2013 vs 2011 Reports Serge Gorlin 37

38 Tails Assay Essentially an economic decision relative price of U and SWU 0.30%-0.35% until , now below 0.25% 2013 Market Report % for all reactors Serge Gorlin 38

39 Background China s resourcing of uranium Demand for uranium will increase sharply after Domestic production capability is limited. (~1500tU per year) Government s Guideline- Three 1/3 s 1/3 of demand to be satisfied by domestic production; 1/3 of demand to be satisfied by purchasing natural uranium globally; 1/3 of demand to be satisfied by acquiring overseas resource asset. Serge Gorlin Source: CGNPC